Abstract

Self-employment and Entrepreneurship are considered as being major means for development, employment and wealth creation and, therefore, gaining an increasing attention from governments and policy makers. However, very little is known about what factors determine self-employment decisions of individuals in the study area. Therefore, the main objective of this study is to investigate the various determinants of self-employment decision using the survey data collected from a total of 242 randomly selected respondents (147 self employed and 95 paid employed) from four towns of West Shoa Zone, Oromia Region, Ethiopia. The study employed Logistic Regression technique to estimate the determinants of self-employment. The study came with the finding that age of the respondents, educational attainment, household size, having self employed parent, inheritance, and access to credit variables have significant and positive influences on the decision to participate in self employment. On the other hand, age squared of the respondents and access to paid employment affects self employment status negatively and significantly. Based on the results and discussions, study suggests that government organization and other development practitioners who are concerned with unemployment reduction and poverty alleviation through the promotion of self employment need to take these determining factors in to account to achieve better outcome and enhance the self employment and entrepreneurship activities in the study area and in the country in general.

Mccline, Richard L. (2004). Opportunity Recognition: An Exploratory Investigation of a Component of the Entrepreneurial Process in the Context of the Health Care Industry: Theory and Practice. Tertiary Education Management, 25(2):81-94.

MoLSA. (2009). National Employment Policy and Strategy of Ethiopia, (November), 386. Retrieved from http://www.molsa.gov.et/English/EPro/Documents/National Employment Policy and Strategy of Ethiopia.pdf